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AP Wins Copyright Lawsuit Against Clipping Service

A federal judge has ruled that the paid
clipping service Meltwater infringed copyright by sending clients excerpts of stories from The Associated Press.

U.S. District Court Judge Denise Cote in New York rejected Meltwater's argument
that it made fair use of the wire service's stories. “AP has shown that it is entitled to summary judgment on its claim that Meltwater has engaged in copyright infringement and that
Meltwater’s copying is not protected by the fair use doctrine,” Cote wrote.

Cote specifically said she disagreed with Meltwater's assertion that it served as a search engine, and
should therefore have the same ability to legally copy and display material as other search engines. "Meltwater News is an expensive subscription service that markets itself as a news clipping
service, not as a publicly available tool to improve access to content across the Internet,” Cote said in her 91-page ruling. “Instead of driving subscribers to third-party websites,
Meltwater News acts as a substitute for news sites operated or licensed by AP.”

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Cote emphasized in the decision that Meltwater charged clients for clips, but failed to pay licensing fees
to the AP -- a business model that Cote says threatens news-gathering operations. “Investigating and writing about newsworthy events occurring around the globe is an expensive undertaking and
enforcement of the copyright laws permits AP to earn the revenue that underwrites that work,” she wrote. “Permitting Meltwater to take the fruit of AP’s labor for its own profit,
without compensating AP, injures AP’s ability to perform this essential function of democracy.”

In her opinion, Cote also said she disagreed that Meltwater's aggregation function
was “transformative” -- which is one of the criteria that judges evaluate in deciding fair use. She said that company's aggregation was fully automated, and that Meltwater didn't add
“any commentary or insight” in its reports. The judge also noted that Meltwater excerpted the AP articles' lede sentences -- which typically include the most critical information.

Meltwater says it plans to appeal to the 2nd Circuit Court of Appeals.

The lawsuit drew interest from a wide range of groups. The New York Times Co. and other newspapers sided with the AP, arguing that Meltwater's "parasitical behavior" threatens news organizations. But digital rights groups weighed in on Meltwater's behalf, arguing
that the company has a fair use right to display fragments of news articles.

The Computer & Communications Industry Association, a trade group for tech companies, warned in
a separate friend-of-the-court brief that a decision against Meltwater could harm many search companies.

Cote emphasized in her opinion that she doesn't consider Meltwater a “search
engine.” She specifically attempted to differentiate between Meltwater and Google News Alerts, noting that Google's alerts “do not systematically include an article’s lede and are --
on average -- half the length of Meltwater’s excerpts.”

But her decision still raises the possibility that a company like Google could be liable for its alerts, which send people
emails with headlines and snippets of stories about particular companies, according to Santa Clara University law professor Eric Goldman.

He adds that the ruling is a “mixed bag”
for Google News Alerts. On the one hand, like Meltwater, Google News automatically scrapes material from news organizations.

But unlike Meltwater, Google is free, available to anyone
online, and its news service doesn't appear to be monetized. Those factors would weigh in favor of Google in a fair use analysis, Goldman says.